GBP/JPY
Commentary – We wrote last week that “a break under 239.00 would suggest that the next leg down was already underway and that the rally from 239.00 to 241.41 was a-b-c.” The break of 239.00 led to the breakdown that has seen the GBPJPY test 221.50 today. The decline from 244.03-221.51 is most likely a 3rd wave since the decline is 161.8% of 251.10-237.62. We expect a 4th wave to unfold from little (if any) under 221.51. A prior 4th wave is resistance at 227.93. A 5th wave decline would register a new low but the decline is unlikely to resemble what we have seen in the last week (as 3rd waves are usually much stronger than 5th waves). In summary, expect lower prices but in a more choppy manner.

Strategy – Bearish targets hit at 222.30 (flat now)

GBP/CHF
Commentary – The near term structure is not clear but we maintain that the GBPCHF is headed lower longer term due to the 3 wave advance from 2.0928. Potential trendline support, drawn off of the July 2006 and March 2007 lows, is near 2.3820. A drop under there gives scope to a test of 2.3288. Near term resistance is 2.4380.

Strategy – Remain bearish against 2.4963, target below 2.3288.

GBP/AUD
Commentary – We wrote last week that “we see potential for a rally to 2.4287 to complete wave c of an expanded flat.” The pair has skyrocketed the last two days over 1,200 points (well past 2.4287). This rally should give way to a consolidation phase, which should be followed by additional gains. Near term support is at 2.4784.

Strategy – Flat

Jamie Saettele is a Technical Currency Analyst for FXCM.